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Average age of retirement rises as people work longer

Released: 16 February 2012 Download PDF

New statistics published today by the Office for National Statistics reveal that that people are working longer than they used to. The average age at which people leave the labour market – a proxy for average age of retirement – rose from 63.8 years to 64.6 years for men and from 61.2 years to 62.3 years for women between 2004 and 2010.

This average summarises information about the ages at which people stop working, which  differ for different people. For men, the peak ages for leaving the labour market are 64 to 66 years. For women, the peak ages are 59 to 62 years. Thus, retirement peaks around State Pension Age (SPA) for both sexes; but many people retire before SPA, and others work beyond SPA.

In 2010, there were 3.2 people of working age supporting each person of SPA and over in the UK. Without any changes to SPA, this ‘old age support ratio’ would drop to 2.0 by 2051 but under current legislation SPA has already begun to increase for women and SPA for both sexes will rise to 68 by 2046. When these SPA changes are taken into account, the old age support ratio is projected to fall less, to 2.9 by 2051.

Women’s life expectancy at SPA will decline over this decade as their SPA rises. Between 2021 and 2051 life expectancy at SPA is expected to rise gradually for both sexes, because, following a change in the assumptions for future life expectancy in ONS's 2010-based population projections, life expectancy at the relevant ages is now projected to increase at a slightly faster rate than the increases in SPA contained in the Pensions Acts 2007 and 2011.

There are inequalities in life expectancy between social classes. The latest estimates for England and Wales show a gap of over three years in life expectancy at age 65 between the highest and lowest classes in the National Statistics Socio-economic Classification (NS-SEC). Within the UK, life expectancy at age 65 is highest in England and lowest in Scotland.

A related question is whether people will be able to enjoy their retirement in good health. In 2008, the latest year for which figures are available, UK men at age 65 had 9.9 years of healthy life expectancy compared with 17.6 years of life expectancy, while UK women at age 65 had 11.5 years of healthy life expectancy compared with 20.2 years of life expectancy. These figures are for the average person and do not take account of differences in socio-economic class or location.

 

Background notes

  1. 1. This news release is based on Pension Trends Chapter 2: Population change, Pension Trends Chapter 3: Life expectancy and healthy ageing and Pension Trends Chapter 4: The labour market and retirement, available at www.ons.gov.uk/ons/about-ons/our-statistics/publications/pension-trends/index.html
  2. 2. The podcast and other information accompanying this release are available at www.ons.gov.uk/ons/taxonomy/index.html?nscl=Pensions
  3. 3. The average age at which people leave the labour market is calculated by ONS using the duration of working life (DWL) or ‘working life expectancy’ approach, which combines information on life expectancy based on single calendar year versions of Interim Life Tables with economic activity rates from the Annual Population Survey. Details of this methodology can be found in Pension Trends Chapter 4: The labour market and retirement (see above) and in the article ‘Average age of withdrawal from the labour market: A methodology update’ available at www.ons.gov.uk/ons/rel/pensions/average-age-of-withdrawal-from-the-labour-market/2010/index.html
  4. 4. Projections of the old age support ratio and life expectancy in this release assume that State Pension Age (SPA) will increase in line with current legislation, not including changes that have been announced or discussed but have not yet become law. Under the Pensions Act 1995, there was to be a gradual rise in the SPA of women from 60 to 65 years between April 2010 and April 2020. However, under the Pensions Act 2011 women’s SPA will increase to 65 between April 2016 and November 2018; and from December 2018 the SPA for both men and women will increase to reach 66 in October 2020. Then, under the Pensions Act 2007, SPA will rise to 67 between 2034 and 2036 and 68 between 2044 and 2046.
  5. 5. For the purposes of the analysis, the SPA changes are applied to the UK population. However, it should be noted that pensions in Northern Ireland are a devolved matter and legislation equivalent to the Pensions Act 2011 is still under discussion.

  6. 6. Projections of the old age support ratio and life expectancy in this release relate to the ONS's 2010-based principal population projections, available at www.ons.gov.uk/ons/taxonomy/index.html?nscl=Population+Projections
  7. 7. Details of the National Statistics Socio-economic Classification is provided in Pension Trends Chapter 3: Life expectancy and healthy ageing (page 3-6).
  8. 8. The figures for life expectancy and healthy life expectancy at age 65 in 2008 quoted in this release are based on a three year moving average plotted on the central year; therefore the 2008 figures use data from 2007 to 2009.
  9. 9. The figures for life expectancy quoted in the last two paragraphs of this release use the period method for calculating life expectancy, which applies mortality rates based only on deaths in the year in question. Although this method underestimates life expectancy when mortality rates are falling, it avoids the element of uncertainty associated with assumptions about future mortality rates.
  10. 10. Details of the policy governing the release of new data are available from the Media Relations Office.
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  12. 12. National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference.
    © Crown copyright 2012.

     

  13. Next publication of Pension Trends: 26 July 2012 (provisional date)

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  14. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

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